The Degrowth Dilemma: Why Economic Expansion and Ecological Survival Can’t Coexist

By Rahul Joshi May 20, 2025

The global economy is addicted to growth. Every government budget, corporate forecast, and stock market valuation depends on the assumption that GDP will rise forever. Yet on a finite planet, infinite growth is mathematically impossible. The United Nations Environment Programme (UNEP 2024) warns that humanity is consuming natural resources at 1.75 times Earth’s regenerative capacity. As ecosystems collapse and inequality widens, a growing number of economists argue for a radical alternative—degrowth: a deliberate scaling down of production and consumption to restore planetary balance. But can modern civilization survive without growth?

The Myth of Green Growth

Mainstream policymakers promise “green growth”—decoupling economic expansion from ecological harm through technology and efficiency. The rhetoric is comforting but deceptive. The European Environmental Agency (EEA 2024) finds that while some countries achieved relative decoupling (emissions rising slower than GDP), none have achieved absolute decoupling at the global scale.

Efficiency gains often trigger rebound effects—where cost savings lead to higher overall consumption. For instance, improvements in LED lighting reduced per-lumen energy costs by 80 percent, yet total global electricity use for lighting rose by 30 percent between 2010 and 2023 (IEA Energy Outlook 2024).

Green growth, then, is not a bridge to sustainability but a delay tactic—a promise that capitalism can continue unchanged with a fresh coat of paint.

The Arithmetic of Overshoot

The data are unambiguous. The Global Footprint Network (2024) estimates that global material extraction surpassed 100 billion tons per year for the first time in 2023. Even with aggressive energy transition policies, the World Resources Institute (WRI 2024) projects global consumption will rise 60 percent by 2050.

This expansion drives biodiversity loss, freshwater depletion, and carbon accumulation. Each percentage point of global GDP growth currently adds 0.6 percent to CO₂ emissions, even accounting for renewables. Growth and sustainability remain positively—not inversely—correlated.

The Degrowth Proposition

Degrowth does not mean collapse or austerity. It means prioritizing well-being over throughput. Economists such as Timothée Parrique and Jason Hickel propose restructuring economies around sufficiency rather than accumulation—redistributing resources, shortening working hours, and focusing public investment on care, education, and ecological restoration.

The European Degrowth Observatory (EDO 2024) calculates that a 30-hour workweek across OECD nations could reduce emissions by 15 percent while maintaining average living standards through efficiency and redistribution. Meanwhile, studies in Finland and New Zealand show that happiness indices remain stable or even improve when consumption plateaus.

Why Economists Fear Degrowth

Growth is embedded in institutional DNA. Pension systems, debt structures, and government tax bases all rely on expanding GDP. Without growth, the arithmetic of capitalism breaks down. The IMF Fiscal Monitor (2024) warns that a permanent low-growth scenario could raise debt-to-GDP ratios by 30 percentage points within a decade, jeopardizing fiscal stability.

This dependency turns growth into ideology rather than evidence. When prosperity equals expansion, any alternative becomes heresy. Yet the contradiction deepens: the pursuit of endless expansion is now the primary threat to the system’s own survival.

Corporate Resistance and Greenwashing

Corporations have co-opted the language of sustainability while maintaining the structure of consumption. The Carbon Disclosure Project (CDP 2024) reports that the top 100 companies are responsible for 71 percent of global industrial emissions. Despite net-zero pledges, corporate emissions fell only 1.8 percent between 2020 and 2023.

Greenwashing replaces systemic change with symbolism—carbon offsets instead of reduction, recyclable packaging instead of reduced production. The global green bond market, valued at US$2.3 trillion (BloombergNEF 2024), funds projects where only 40 percent demonstrate measurable emission reductions. The other 60 percent simply rebrand conventional capital flows.

The Social Dimension

Degrowth critics argue that shrinking GDP will exacerbate poverty. But global inequality has soared despite decades of growth. The World Inequality Database (2024) shows that the richest 1 percent captured 38 percent of all new wealth generated since 1995. Growth has not trickled down—it has concentrated up.

A degrowth transition, if designed equitably, could instead redistribute work and income. Universal basic services—healthcare, education, transport, energy—reduce dependence on consumer markets while improving quality of life. The UN Development Programme (UNDP 2024) finds that countries with high public service provision achieve similar human development outcomes at 40 percent lower resource intensity.

Toward a Post-Growth Civilization

The central question is not whether growth can continue—it is what replaces it when it cannot. Policymakers must begin building post-growth institutions now: debt structures decoupled from GDP, fiscal frameworks tied to ecological indicators, and labor markets that reward contribution rather than output.

The OECD Well-Being Economy Initiative (2025) proposes integrating environmental and social metrics into national budgets, replacing GDP with a “Sustainable Prosperity Index.” Such models reframe success not as “more,” but as “enough.”

The Future Beyond Expansion

Degrowth is not the end of progress—it is the redefinition of it. The greatest illusion of the twenty-first century is that sustainability and endless expansion can coexist. The planet is already rejecting that equation through fires, floods, and famine.

To survive, humanity must learn an older economic truth: that wealth is not what we accumulate, but what we sustain.

Works Cited

“Global Resource Outlook 2024.” World Resources Institute (WRI), 2024.

 “Global Material Flow Analysis.” Global Footprint Network, 2024.

 “Energy Efficiency and Rebound Study.” International Energy Agency (IEA), 2024.

 “Green Growth and Decoupling Report.” European Environmental Agency (EEA), 2024.

 “Fiscal Monitor 2024.” International Monetary Fund (IMF), 2024.

 “Corporate Emissions Disclosure Report.” Carbon Disclosure Project (CDP), 2024.

 “Green Bond Market Outlook.” Bloomberg New Energy Finance (BNEF), 2024.

 “Human Development and Resource Intensity.” United Nations Development Programme (UNDP), 2024.

 “Global Wealth and Inequality Data.” World Inequality Database (WID), 2024.

 “Well-Being Economy Initiative.” Organisation for Economic Co-operation and Development (OECD), 2025.